Electronics, bike makers can now reinvest exempted tax money in 3 years
The National Board of Revenue (NBR) has relaxed conditions for the manufacturers of refrigerator, air conditioner, compressor and motorcycle to qualify for the reduced tax benefit.
The revenue board has extended the obligatory tenure for these entrepreneurs to reinvest 10% of the reduced tariff from one year to three years and lifted the obligation to invest in the stock market, according to a statutory regulatory order (SRO) issued by the NBR on 21 October this year.
NBR officials say the facility has been made more pragmatic for the industries through the new notification.
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The government has already reduced the corporate tax rate on the income of the electronics and motorcycle industries to 10%.
At present, the tax rate for non-listed companies is 30% while that for listed ones is 22.5%.
However, in order to obtain this benefit, the companies had to invest 10% of the exempted tax within one year.
A senior official in the NBR's income tax department told The Business Standard on condition of anonymity that it is difficult for companies to calculate income within a year and meet the conditions for reinvestment.
"They claim it is not realistic at this time of the pandemic. They are willing to invest but want some time. On the other hand, even though we are exempting taxes, our aim is to make sure the exempted taxes are reinvested.
"In addition, the issue of investing in the stock market has been left to the discretion of the companies. They will invest there if they want, but the provision to force them has been repealed."
